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2023 DIGILAW 1252 (DEL)

Roshan Real Estate Pvt. Ltd. v. Union of India

2023-02-27

NEENA BANSAL KRISHNA, SURESH KUMAR KAIT

body2023
JUDGMENT (Oral) 1. The present appeal is preferred by the appellant against the judgment dated 07.01.2022 passed by the learned District Judge in OMP Number 196/19, titled as Roshan Real Estate Pvt. Ltd. Vs. Union of India , whereby its objections filed under Section 34 of the Arbitration and Conciliation Act, 1996 against the arbitral award dated 25.07.2019, were dismissed. 2. Notice issued. 3. Ms. Monika Arora, learned CGSC appearing on behalf of appellant, accepts notice of the appeal. 4. The facts giving rise to the present appeal are that the appellant-M/S Roshan Real Estate Pvt. Ltd., was awarded a work of construction of New Office Building at Supreme Court of India (Civil and internal electrical work) for a value of Rs.21,21,57,798/-, which was to be completed in 24 months. Subsequent upon submission of performance guarantee to the tune of Rs.1,06,07,890/- on 20.09.2012, the parties entered in an agreement and the Letter of Award was issued by the respondent on 25.09.2012. 5. The appellant has pleaded that the excavation work was in progress and disposed off earth was being levelled and neatly dressed in terms of provision of Item No. 1.1 of the Agreement. However, respondent informed the appellant that the disposed off earth was not levelled and dressed and so, progressive amount was withheld as recovery from the RA bill. The appellant objected to the claims of the respondent vide its letter dated 18.07.2014 to the Chief Engineer and letter dated 02.08.2014 to the Superintendent Engineer of the respondent and sought a direction not restrain or withheld any amount and release the same. The appellant requested the respondent vide its letter dated 01.09.2014 to release the withheld amount or to refer the matter to Dispute Redressal Committee ("DRC"). In a series of further communications, the appellant reiterated its request to refer the matter to DRC. Though the respondent vide its letter dated 09.06.2015 informed the appellant regarding constitution of a DRC, but appellant did not file its claim before DRC. Rather, appellant filed a petition before this Court seeking appointment of an Arbitrator for adjudication of disputes between the parties. 6. This Court vide order dated 02.06.2016 appointed the Sole Arbitrator to adjudicate the disputes between the parties. Rather, appellant filed a petition before this Court seeking appointment of an Arbitrator for adjudication of disputes between the parties. 6. This Court vide order dated 02.06.2016 appointed the Sole Arbitrator to adjudicate the disputes between the parties. The learned Arbitrator in the impugned arbitral Award dated 25.07.2019 noted the following claims preferred by the appellant herein: " Claim No.1 : The Contractor claims a sum of Rs.1.50 crores illegally withheld on a/c of item No. 1.6 from the bills or any amount deducted by introducing item 1.6 in the bill(s) and that any further amount withheld/recovered on a/c of item No. 1.6 shall also be matter of claim. Claim No.2 : The contractor claims the payment of loading and doing levelling and dressing twice (Once at site and then at disposal site) @ the rate of item No. 1.6. Claim No.3 : The Contractor claims a sum of Rs.18,58.839/- on a/c of cost of earth retaining structure (temporary soldier pile) retained by the department which otherwise was the property of Contractor and should have been removed. Claim No.4 : The claimant claims interest @15% p.a. on all the above amounts from the date the respective amount was due till realization. Claim No.5 : Contractor claims cost of proceeding-Rs.2,000/- plus fee paid to Ld. Arbitrator and other expenses on actual basis." 7. The respondent-UOI refuted the claims made by the appellant, the crux wherein, as noted in the impugned arbitral award are as under: Claim No.1 : The claimant quoted rate of Rs.100 per-against item No.1.1 which includes excavation, disposal within 50 meters and levelling and neatly dressing of excavated earth whereas they quoted deduction rate of Rs.1,500/- per cum against item No.1.6 for not levelling and neatly dressing of earth which is only some part of total operations involved in item No.1.1. The deduction quoted by the claimant was totally absurd and abnormally high, presumably to become lowest bidder. The sequence of executing earth, claimed by the claimant was false and fabricated. The earth work was executed by mechanical means and was directed loaded into trucks/dumper for its disposal outside the campus and the excavated earth was not leveled and dressed by the claimant. This sequence of activities was neither requirement of site nor as per the spirit of the Agreement. The claimant did not submit the measurements of Item No.1.6 deliberately in spite of repeated requests of respondents. This sequence of activities was neither requirement of site nor as per the spirit of the Agreement. The claimant did not submit the measurements of Item No.1.6 deliberately in spite of repeated requests of respondents. The contention of the claimant that there was building rubbish/malba on the top layer of the site was wrong and respondent never directed the claimant for levelling and dressing of the disposed soil at construction site as well as outside the campus. The contention of the claimant that levelling and dressing being done was in the knowledge of respondent is not correct. Claim No.2 : The claim is not covered under reference, however, the element of loading and unloading is included in excavation item, however, claimant never demanded loading and unloading during the currency of the contract, as it was an afterthought. Claim No.3 : As per the agreement, the material for removable temporary earth, retaining structure/shoring/strutting etc was property of the contractor. Paras 1.14 and 1.15 stated that the quoted rate is inclusive of all incidental and non removal of part material is also incidental. Claim No.4 : The claim of interest is not covered under reference and all the amounts were released in favour of the claimant against interest bearing term deposit receipts submitted by them and interest will be paid by the concerned bank to the claimant as per applicable rates. Claim No.5 : This claim regarding cost is not covered under reference and it is arbitrary, baseless, after thought and not tenable. 8. The learned Arbitrator after adjudicating the claims and objections of the parties, passed the arbitral Award dated 25.07.2019, returned the following findings: " Analysis and findings : Claim No.1 : XXX From the foregoing discussion, I can safely conclude that as per the spirit of the Agreement between the parties and their conduct as indicated by the Respondent in their Exhibit R-18, quantity to be considered for deduction against Agmt, Item No. 1.6 should be based on the quantity as per item No. 1.5 (which is also the difference of quantity executed/recorded against Agmt. Item Nos.1.1 and 1.3) which quantity is 14,508.65 i.e. the one mentioned in Exhibit R-18 by the Respondent. The quantity now intimated by the Respondent against Agmt. Item No. 1.5 is also 14,508.64 cum. Item Nos.1.1 and 1.3) which quantity is 14,508.65 i.e. the one mentioned in Exhibit R-18 by the Respondent. The quantity now intimated by the Respondent against Agmt. Item No. 1.5 is also 14,508.64 cum. There is no justification on the part of the Respondent to now take the quantity against item No. 1.6 (19, 415.64), the same as against item No. 1.1. Based on this conclusion and the earlier one wherein I stated, "It transpires that against the extreme and conflicting positions taken by the two parties regarding levelling and dressing the surplus excavated earth, the actual facts lie somewhere in-between. In other words, out of total quantity of earth work for carriage and disposal as per item No. 1.5, we can reasonably take 50% of this quantity under agreement item 1.6 and remaining quantity does not qualify for deduction as it had to be levelled and dressed at site because of space crunch", I calculate that 50% of the quantity under item No. 1.5 (i.e. 0.50x 14508.65 cum which works cut to 7254.33 cum) is operatable under agreement item No. 1.6 for reasons already explained. In other words, an amount of Rs.1,08,81,495/- (i.e. 7254.33 x 1500) is recoverable from the Claimant under agreement item No. 1.6. Respondent should therefore, finalize the bill of the Claimant releasing the amount withheld by them (on adhoc basis) but after recovering the deduction amount as per item No. 1.6 of Rs.1,08,81,495/- as stated above. This is my award against Claim No. 1 of the Claimant. Claim No.2: XXXXX "This Claim is not covered under reference made by the Hon'ble Delhi High Court vide order dated 02.06.2016 as Claimant did not prefer this Claim in Arb.P.659/2015" Accordingly, I am unable to adjudicate this claim of the Claimant for want of reference in this regard. Hence, no award by me on this claim." Claim No.3 : The amount of claim of Rs.18,58,839/-. There are no supporting calculations. However, Exhibit C-36 dated 11th March 2014 filed with the SOC mentions about some Extra item statement amounting to Rs.18,58,839/-. The quotation and analysis of rate said to have been enclosed with this forwarding letter to EE of the Respondent is not placed before the AT. There are no supporting calculations. However, Exhibit C-36 dated 11th March 2014 filed with the SOC mentions about some Extra item statement amounting to Rs.18,58,839/-. The quotation and analysis of rate said to have been enclosed with this forwarding letter to EE of the Respondent is not placed before the AT. In the written submission dated 13.05.2019, Claimant have however, stated, " The amount claimed in this regard is Rs.6,91,503/-." There is no clarification in this regard to change in the claimed amount from the Claimant. There are also no supporting calculations in respect of the aforesaid figures placed before at AT. In the absence of the same, I pronounce "NIL" award in respect of this claim. Claim No.4 : The contention of the Respondent Viz "This claim regarding interest is not covered under reference made by Hon'ble Delhi High Court vide order dated 02.06.2016 on Arb. P. 659/2015 is not correct as this claim figures at page 19 of the Arb. P. 659/2015. However, since there is no award in favour of the Claimant, there is no question of grant of interest. As such, "NIL" award against this claim." 9. Against the aforesaid arbitral Award dated 25.07.2019, appellant herein filed objections under Section 34 of Arbitration and Conciliation Act before the learned District Judge as OMP (COMM) 196/2019 on the ground that the learned Arbitrator had ignored the evidence and documents produced on record by the appellant/petitioner and decided Claim No.1 in favour of the respondent, which was infact illegally withheld by respondent. Another ground of objection was that despite leaned Arbitrator noting the fact that the excavated earth was being levelled and dressed at Rajghat due to space Crunch at the works site, he passed the Award against the appellant by ignoring the fact that the excavated soil had to be levelled at the site first to create space and later transported to Rajghat for final levelling and dressing could only be done during night time as operation of the heavy truck was not allowed during day time. The appellant pleaded before the learned District Judge that the learned Arbitrator ignored the material evidences before him against the condition No.1.10 of the Agreement that the removable temporary earth structure shall be property of the Contractor. The learned District Judge after examining the contentions of the appellant/petitioner, held as under: "41. The appellant pleaded before the learned District Judge that the learned Arbitrator ignored the material evidences before him against the condition No.1.10 of the Agreement that the removable temporary earth structure shall be property of the Contractor. The learned District Judge after examining the contentions of the appellant/petitioner, held as under: "41. Having examined the various contentions of the petitioner on the touchstone of the parameters of interference as explicitly laid down by the Supreme Court in several judgments referred to above, I am of the view that the impugned Award does not suffer from any infirmity or error apparent on the face of record. It is not for this Court to sit in appraisal of the evidence led before the learned Arbitrator and this Court will not open itself to the task of being a judge on the evidence placed before the Arbitrator which was subject matter of dispute. In the present case, the Arbitrator has deliberated on the issues under reference which were within his competence and as per the agreement entered into between the parties. The Arbitrator has duly explained the reasons for arriving at his decision. There is nothing to indicate that award is in conflict with the basic notions of justice and the fair play and fundamental policy of Indian law or in contravention of the terms of the agreement or it lacks reasoning as pleaded in the petition." 10. The aforesaid decision dated 07.01.2022 passed by the learned trial court is under challenge in this appeal filed under the provisions of Section 37 (1) (c) of the Arbitration and Conciliation Act, 1996 (As Amended) and Section 13 of the Commercial Courts Act, 2015. 11. During the course of hearing, learned counsel appearing on behalf of the appellant submitted that the learned District Judge has erred in dismissing the objection petition filed by the appellant on the ground that the evidences led before the learned Arbitrator cannot be examined. 12. On the other hand learned CGSC disputed the contentions raised on behalf of the appellant and submitted that the impugned arbitral Award is well merited as it is based upon documentary evidence placed before the learned Arbitrator and has therefore also been upheld by the learned trial court and thus, the present appeal deserves to be dismissed. 13. 12. On the other hand learned CGSC disputed the contentions raised on behalf of the appellant and submitted that the impugned arbitral Award is well merited as it is based upon documentary evidence placed before the learned Arbitrator and has therefore also been upheld by the learned trial court and thus, the present appeal deserves to be dismissed. 13. Upon hearing learned counsel representing both the sides and on perusal of the material placed before this Court, we find that the plea of appellant that the learned District Judge has erred in dismissing the objection petition filed under Section 34 of the Act on the ground that the evidences led before the learned Arbitrator cannot be examined, cannot be disputed. In National Highways No. 45E and 220 National Highways Authority of India Vs. M. Hakeem , 2021 SCC OnLine SC 473 the Hon'ble Supreme Court has held that under Section 34 of the Arbitration and Conciliation Act, 1996, Courts cannot modify or vary an arbitral award. It has been further held that " given the very limited judicial interference on extremely limited grounds not dealing with the merits of the award, the "limited remedy" under Section 34 is coterminous with the "limited right" namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act, 1996 ." 14. In fact while hearing an appeal under Section 37 (1) (c) of the Arbitration and Conciliation Act, 1996 read with Section 13 of The Commercial Courts Act, 2015, this Court also cannot in depth scrutinize the arbitral Award and has only a limited scope to interfere. On this aspect, the pertinent observations of the Supreme Court in MMTC Ltd. Vs. Vedanta Ltd. , (2019) 4 SCC 163 are as under: "14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings." 15. In view of pertinent observations of the Hon'ble Supreme Court, this Court has limited scope to interfere only to the extent to adjudge whether the claims and counter claims raised by the parties were noted by the learned Arbitrator while passing the arbitral Award and the learned trial court while adjudicating the objections raised by the party under the provisions of Section 34 of the Act, has examined as to whether the Award suffers from any patently illegality. 16. Relevantly, learned counsel for appellant has submitted that the challenge to the impugned arbitral Award and decision of the learned trial court primarily pertains to Claim No.1. 17. Pertinently, the Claim No.1 raised by the appellant before the learned Arbitrator is in respect of amount of Rs.1.50 crores which was withheld by the respondent on account of item No. 1.6. With regard to claim No.1, the stand of respondents before the learned Arbitrator was that the appellant had not submitted the measurement in respect of item No.1.6 in spite of repeated requests. It was submitted by the respondents that sequence of excavating the earth and dumping it outside the campus was neither the requirement of the site nor it was under the Agreement. Also submitted that the claim of the appellant that there was mulba on the top layer of the site was wrong and respondent never directed the appellant to level or dress the disposed of soil either on site or outside the campus. 18. The learned Arbitrator while deciding the aforesaid Claim No.1 noted that the two conflicting positions taken by the parties in respect of levelling and dressing up the surplus excavated earth as per item No.1.5 can reasonably be taken as 50% of this quantity under item No.1.6 and the remaining soil does not qualify for deduction, as it had to be levelled and dressed at site due to space crunch. Meaning thereby, 50% of the quantity under item No.1.5 (i.e. 0.50 X 1450.65 cubic meter i.e. 7254.33 cu.m) is operatable under Agreement No. 1.6. Thereby amount of Rs.7254.33 X 1500 (as quoted by appellant/petitioner for tendering item No.1.6) i.e. Rs.1,08,81,495/- was recoverable from petitioner/appellant under the Agreement. The learned Tribunal, therefore, directed the respondent to settle the bill by releasing the amount withheld by it after recovering the amount of Rs.1,08,81,495/- as per Clause 1.6. 19. On this count, the learned District Judge in the impugned judgment noted Item No. 1.6 which reads as under: "Deduct for disposed files not levelled and neatly dressed against earth excavation items. Quantity 19347 cu.m" The learned Tribunal noted that item 1.6 was to be operated only in case the disposed of earth within 50 m was not neatly dressed. If the disposed earth was neatly dressed and levelled as per item 1.1, it was not to be taken in the bill. Also, the element of loading and unloading was not included in Item No.1.1 and 1.6. The trial court also noted that item No.1.6 was not applicable if the earth was not disposed of upto 50 m as per item No.1.1. 20. The learned trial court has also observed that the appellant/petitioner has admitted that the excavated earth was disposed of outside the campus i.e. at Rajghat, however, has not been able to bring any document on record that the levelling and dressing of earth was done at Rajghat. To the contrary, respondent has brought on record document Ex. R-1 i.e. letter dated 29.06.2013 issuing instruction to the appellant/petitioner, wherein no instruction was given to appellant/petitioner to level or dress the earth of the disposed of soil. On the decision rendered by the learned Arbitrator, learned District Judge observed and held as under: "31. He considered the extreme and conflicting position taken by the parties regarding levelling and dressing of surplus excavated earth and logically and reasonably assessed that out of the total quantity of earth work for carriage and disposal as per item 1.5, 50% of this quantity be taken under item 1.6 and the remaining quantity-would not qualify for deduction as it had to be levelled and dressed at site because of space crunch. I find that he has given a logical reasoning while assessing the quantity after understanding the site conditions and the manner the above items were executed by the petitioner. This logic is writ large as the stacking of earth excavated during late evening hours would not require levelling and dressing and could be taken away in trucks during night to the disposal site." 21. A perusal of impugned Award as well as decision of the learned District Judge clearly shows that the different claims raised by the appellant/petitioner pertain to levelling and dressing of surplus excavated earth and it revolves around total quantity of earth work for carriage and disposal as per item 1.5 and 1.6. It is noted in the impugned judgment passed by the trial court as well as in the impugned Award passed by the learned Arbitrator that the excavated earth was to be disposed of at Rajghat due to space crunch, however, the appellant did not bring any documentary evidence to support that it had done the levelling and dressing of disposed earth at Rajghat except mentioning in the column of monthly progress. The learned Arbitrator has also referred to the measurement recorded by the site staff (Ex. R-18) to give final quantities of the earth work done by them and made a comparison of the quantities submitted by both the sides and discussed in detail the item and the quantities considered for deduction against item 1.6, which is based upon item no. 1.5. 22. In the light of above and in our considered opinion the impugned Award as well as judgment passed by the learned District Judge dismissing the objections do not suffer from any patent perversity or illegality. 23. The present appeal is accordingly dismissed. Pending applications, are disposed of as infructuous.